GBP/USD – 1.3212
Original strategy :
Buy at 1.3170, Target:1.3370, Stop: 1.3110
New strategy :
Buy at 1.3140, Target:1.3340, Stop: 1.3080
As cable has retreated after rising to 1.3329 yesterday, retaining our view that minor consolidation below this level would be seen and pullback towards support at 1.3161 is likely, however, reckon downside would be limited to 1.3130-40 and bring another upmove later, above 1.3290-00 would bring retest of said resistance at 1.3329, break there would extend recent upmove to 1.3350-55 (50% projection of 1.2109-1.3269 measuring from 1.2774) but overbought condition should limit upside to 1.3390-00 and price should falter below 1.3440-50, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback as said support at 1.3130-40 should limit downside, bring another rise later. Only below previous resistance at 1.3080-85 would defer and risk test of 1.3030-33 support, break there would suggest a temporary top is formed instead, risk correction to 1.2990-00 first.
Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.